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The Payment of Gratuities by Customers in the United
States: An Historical Analysis
Marc S. Mentzer
University of Saskatchewan, Canada
Contrary to some travel guidebooks which state that the payment of gratuities (tips) in
the US is due to low wage levels or the quirks of minimum wage laws, the roots of US
tipping are comprised of a number of historical forces present in the hospitality industry
between the Civil War and the early 1920s. Up to 1900, hotel proprietors regarded
gratuities as a bribe to the server to give away excessive amounts of food to customers.
However, a shift in hoteliers’ attitudes occurred with the increased popularity of the
“European Plan”, in which hotel rooms were priced separately from hotel meals. This
trend caused owners of dining establishments to regard tips as a supplement to wages
rather than as a bribe. In addition, the advent of Prohibition after World War I had the
indirect effect of making the European Plan more widespread, and with that trend, the
payment of gratuities at meals became even more common. Even though international
travel sometimes leads to misunderstandings regarding tipping, the custom is now
thoroughly entrenched in US practice.
For many international visitors to the US, an irritating difference in social customs is the
American emphasis on tipping. The sense of annoyance is mutual; service employees
in the US dread the international visitor who doesn’t tip – in the eyes of a service
employee, a violation equivalent to walking out without paying the entire bill. How did
this difference in customs develop?
Until the US Civil War (1865), tipping was very rare in the US, yet deeply entrenched
in Britain (Cocks, 2001). During that era, British visitors to the US commented on the
antipathy toward tipping, and American writers argued that tipping was incompatible
with American equalitarianism. Despite this history, tipping became the custom in the
US in the late 1800s and early 1900s and continues as a deeply rooted custom to this
day. This reversal in US customs regarding tipping can be traced to the transition from
the American Plan (meals included in the hotel room rate) to the European Plan (hotel
meals sold separately from rooms). This transition was by no means smooth or quick,
and for a period of approximately fifty years the hotel industry was divided over how
hotel meals should be priced, and contemporaneously, norms of behaviour regarding
tipping became solidified very slowly in the midst of long-running controversy. During the
transition from a non-tipping culture to a tipping culture, appeals to American patriotism
and the value of equalitarianism were used both to prevent tipping and to defend tipping.
Prohibition (banning of alcoholic beverages), introduced in 1919, was also a significant
force in the institutionalization of tipping in the context of dining.
There is enormous misunderstanding about why tipping is so deeply entrenched in the
US. Travel guidebooks often explain the entrenched nature of US tipping to international
visitors by pointing out that employers are allowed to count tips toward the statutory
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minimum wage within certain limits. (Yet Britain had a similar rule until 2009, which
nullifies this as way of explaining US-British differences in tipping practices.) Such
an explanation is an attempt to find some rational basis for the divergence between US
and British tipping customs, but in reality, tipping became common in the US in the late
1800s, long before the US created its first statutory minimum wage in 1938 (Sachdev,
2003). Another version of the same explanation is that tips are necessary to supplement
low US wages in the service industry, implying that tipping arose in response to low
wages. However, it is arguable whether US waitstaff have a lower standard of living
than their British counterparts, particularly if one goes back to the 1800s when tipping
in the US began. One article in 1893 stated that US serving staff received “good wages”,
while their European counterparts received no wages and had to subsist on tips alone
(Hawkins & Fanning, 1893).
An example of the rationales given to foreign visitors for US tipping customs is provided
by the Time Out series of travel guides: “Waiters and bartenders, in particular, often
make little more than $2 per hour outside of tips. That’s why Americans tip much more
than people in other countries…” (Time Out Boston, 2011, p. 259, emphasis added). It’s
understandable that the author would try to find underlying logic for this custom, but this
results in confusion of cause with effect. While it is true that tips can be counted toward
the statutory minimum wage, at least in Massachusetts, US tipping customs predate the
country’s first minimum wage law. 1
Another way of debunking the belief that the features of minimum wage legislation
determine tipping customs is to compare states. As of mid-2011, the US hourly minimum
wage was $7.25, and it was $2.13 for employees receiving tips (US Department of Labor,
2011). Individual states can impose legislation that is more favourable to the employee
than federal standards but cannot reduce the level of protection provided by federal law.
California, New York State, and a few other states have passed legislation mandating
that all service employees be paid the full minimum wage, and stating that tips cannot
be used to justify paying less than the minimum wage. If tipping was a response to the
fact that tipped employees receive only $2.13 per hour (in most states), then it would
follow that tipping would be at lower levels in California and New York where tipped
and non-tipped employees are entitled to the same minimum wage. Yet tipping appears
to be equally entrenched in all of these states. In explaining why tipping is so prominent
in the US, it is necessary to examine historic causes rather than look at the vagaries of
current employment legislation.
The origins of tipping are in the custom of vails. In medieval Britain, a vail was extra
money given by a noble to a servant for extra duties. By the 1500s, the custom of vails
had expanded to include visitors to a noble residence, who were expected to give money
to their host’s servants who had waited on them. By the 1600s – at least in Britain – the
custom had evolved into tipping, where a customer gives extra money to the employee
of a hotel or dining establishment (Azar, 2004; Segrave, 1998). Yet the custom of tipping
did not appear in the United States until the late 1800s.
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Contrary to the current pattern of complaints about tipping, American visitors to Europe
had long complained about the frequent tips they were expected to distribute to English
and other European service employees. In 1884, The New York Times deemed the
problem to be worthy of an editorial criticizing English-style tipping: “A man must be
a born snob who enjoys the servility and likes to revel in the bought smile of porters
and [railway] guards, who sell civility by the pennyworth” (New York Times, 1884).
It is difficult to pinpoint when US tipping practices surpassed British tipping practices.
Segrave (1998), in his Tipping: An American Social History of Gratuities, marks 1948 as
the year in which American employees’ expectation of tips surpassed that of their British
counterparts, due to Britain’s passage of the Catering Wages Act which established a
minimum wage. Segrave argues that this Act made British employees more amenable to
service charges in lieu of tips, while in the US, employees’ expectation of tips continued
unabated. Paradoxically, minimum wage legislation in the US did not have a parallel
impact on employees’ receptiveness to the concept of a service charge. On the continent,
where American visitors also had a litany of complaints about employees aggressively
seeking tips, the transition from tipping to service charges had occurred even earlier
than in Britain (Seagrave, 1998).
This study examines the origins of tipping in the United States, particularly in dining
and lodging contexts, and relies heavily on the trade publication Hotel Monthly from the
early 1900s which, as will be seen, was a pivotal period during which tipping became
an accepted practice.
Hotel Monthly was a Chicago-based trade magazine for hotel managers, founded in
1892 by John Willy who served as editor (Chicago Daily, 1944). The magazine included
sample menus, analyses of portion control procedures for kitchens, floor plans of new
hotels, summaries of trade association meetings, advice on accounting procedures,
warnings about scams, and the editor’s ruminations on whatever he felt to be of interest
to readers, often expressed as a string of paragraphs on unrelated topics. The nature of
this material is necessarily anecdotal, and assumptions must be made about the extent
to which observations in this magazine can be generalized to the industry as a whole.
To read back issues is to be immersed in a different era when hotel managers’ concerns,
such as the tipping controversy and the virtues of American plan versus European plan,
were very different than the concerns of American hotel managers today.
The evolution of American dining services
While there have always been places where a person could purchase cooked food, the
concept of the restaurant, in a form that would be recognisable today, was slow to develop
in the US. Travellers needed a place where they could buy cooked meals, but otherwise
it was rare for people to “dine out”.
For approximately the first hundred years of the United States’ existence, inns and
taverns provided the only dining services. While taverns and inns might serve cooked
food to a non-lodger, the norm was that the meals were being prepared for overnight
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customers. Accordingly, this discussion treats dining in hotels as representative of paid
dining services. In the 1850s, commentators noted the development of the first American
restaurants, that is, eating establishments that were separate from any overnight lodging
place (Berger, 2011). As restaurants developed, their customs regarding payment were
influenced by what happened in hotel dining rooms, rather than the opposite.
In the early United States, inns and taverns were modeled on the fiction that the customer
was a visitor in someone’s home (Sandoval-Strausz, 2007), The owner of the inn presided
over meals as a father might preside over a family meal, with everyone seated at a single
table, eating from shared serving platters as though they were a large family dining under
the benevolent gaze of the proprietor/host (Raitz & Jones, 1988). This practice was known
as “table d’hôte”, and over time, the term’s meaning broadened to include any situation
where patrons were presented with a predetermined set of dishes. This practice of table
d’hôte was coupled with the American Plan, in which meals were included in the cost
of lodging. In the United States, it was understood that one would not tip the proprietor
of such an inn any more than one would tip a host who had invited a person to dinner.
British visitors of the era were surprised that tips were not expected, but were sometimes
offended by the equalitarian atmosphere in which those serving regarded themselves as
the equal to the customers (King, 1957).
This model was viable as long as overnight lodging places were small and directly
managed by the proprietor. As the American inn or tavern developed in the 1850s into
larger establishments that resemble the current notion of a “hotel”, the custom of seating
all customers at a single table ceased to be practical (Berger, 2011, p. 121). The single
large dining table was divided into smaller tables of six to twelve patrons, although
strangers were still seated together. Also, as large hotels evolved, serving would be
handled by paid employees rather than the proprietor or his family members. Yet these
changes remained coupled with the American Plan in which meals were included in
lodging rates. An employee would serve from large platters and the proprietor would
not be sitting at the head of the table as he would in an earlier era. This set the stage
for the beginning of tipping in the context of US dining. The practice developed of the
customer giving the server a tip for a larger portion or a better cut of meat. The earliest
recorded instances of tipping in a US dining context are in the 1870s, although for
decades it remained a custom that was practised irregularly and unevenly, and managers
frequently sought to forbid it.
From American Plan to European Plan
While the tradition of seating strangers together was quick to fade away in favour of
smaller dining tables, the custom of the American Plan showed more staying power,
surviving until the mid-1920s and even longer in resort hotels.
The transition from American Plan to European Plan caused hotel managers to reverse
their opinion of tipping. As long as meals were included in room prices, servers were
tipped to get a larger portion of food; in essence, the employee was being bribed to give
away more food than would otherwise be given. In that context, it is understandable that
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hotel managers would struggle to eliminate tipping. When hotel restaurants converted
to European Plan (meals charged separately), managers changed their perspective – the
tip was seen as a supplement to the server’s wages, thus reducing the manager’s payroll
costs (Jakle & Sculle, 2009).
The hotel industry’s transition from American Plan to European Plan was slow and
gradual. The frequency with which the topic was addressed in Hotel Monthly indicates
that there was no consensus within the industry until the 1920s. In the first two decades
of the 1900s, Hotel Monthly often had articles or shorter items referring to the virtues
of the European Plan versus the American Plan.
For example in 1915, the manager of a hotel in Hannibal, Missouri, explained that under
the American Plan, room revenue was used to subsidize meal service, and switching to
the European Plan allowed him to price meals so that the dining room was now profitable
(Hotel Monthly, 1915a). Also, this manager argued that the European Plan allowed
him to decrease overhead costs because kitchen expenses could easily be shrunk or
expanded to match day-to-day fluctuations in patronage, whilst the American Plan did
not allow such flexibility. This reasoning is doubtful, since under the American Plan the
number of dining patrons could be accurately calculated once the number of overnight
customers was known, while under the European Plan, it would be difficult to predict
how many overnight customers would take their meals elsewhere. Nonetheless, Hotel
Monthly presented this manager’s reasoning to the readers as fact. Lastly, this manager,
like many observers, pointed out that the American Plan led to a large amount of waste
because people ordered more than they would eat.
Other arguments were made in 1919 by the manager of a hotel in a small Iowa town, who
also said that under the American Plan, meal services ran at a loss and were subsidized
by room revenues (Hotel Monthly, 1919b). This manager stated that the transition to
European Plan allowed the kitchen staff to be cut from fourteen employees to four
employees, implying most of his customers took their meals outside the hotel, but
apparently the customers who dined in-house resulted in a profitable meal service. This
same hotelier also pointed out that under the European Plan, customers tended to take
more expensive rooms within the hotel because quoting room rates on a meals-excluded
basis made rooms appear to be more affordable.
The American Plan persisted in resort hotels long after it had fallen out of favour
elsewhere. A 1915 article trumpeted the features of a new beach resort hotel in Atlantic
City, New Jersey, which had not only separate dining rooms for European Plan and
American Plan, but separate kitchens as well (Hotel Monthly, 1915b; Thomas & Snyder,
2005).
While many hotels transitioned to the European Plan because it was perceived to be
more profitable, there was simultaneously a move afoot to retain the American Plan but
tweak it so it would be more profitable. In 1915, a much-discussed innovation was the
“American Plan Check System”, in which customers wrote their own orders on a paper
pad with carbon copies (Hotel Monthly, 1915d, 1915e, 1915f, 1916b). One benefit was
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that customers would err on the side of underordering if they had to personally handwrite
each item, rather than orally reel off a list of desired items that might or might not be
eventually eaten. Also, having a written record of each order facilitated stricter inventory
control and minimized the problem of staff serving more food than was ordered.
Another effort to tweak the American Plan was to charge an extra fee for those customers
who skipped a meal in order to dine outside the hotel. As explained in the article, “if the
lodging is, customarily, with meals 75¢, to be $1.00 without meals” (Hotel Monthly,
1915d, p. 84). It is difficult to comprehend the logic behind such a surcharge, because
where room rates include meals, it is advantageous to the hotel if a customer forgoes a
meal. The magazine stated the desirability of this fee for missed meals was the “consensus
of opinion” at a hotel managers’ meeting, but does not reveal whether customers revolted
when subjected to what was essentially a fine for missing a prepaid meal. In any event,
a common theme of these incidents was the trend toward treating the dining room as a
profit centre instead of treating food services and other ancillary services as loss leaders.
A 1922 speech by Edward Boss, head of a hotel chain in smaller midwestern cities,
revealed his own decision process in adopting the European Plan (Boss, 1922). At a
hotel managers’ meeting, he pointed out that food costs had doubled over the past six
years, which led him to abandon the American Plan in some hotels. Smaller breakfasts
had become popular, and he was annoyed that American Plan patrons would order large
amounts of breakfast foods which they would leave uneaten. However, when the European
Plan was adopted, lodging customers took their meals at independent restaurants, causing
plummeting food revenues and steady losses. He switched some hotels back to the
American Plan, but this further alienated lodging customers, who took their business to
competing hotels because they preferred the freedom to dine where they wished under
the European Plan. This chain executive ended up concluding that the best option was
to adopt the European Plan and market it heavily to lodging customers, although he kept
some of his hotels on the American Plan.
This executive found himself in the dilemma of many managers, because hotels of that
era were designed with large kitchens and dining rooms on the assumption that all lodging
customers would take all meals in the hotel. Allowing guests to take meals elsewhere
led to wasted space in kitchens and dining room, and a food service staff that would
be too large for the new circumstances. Changing from American Plan to European
Plan necessitated downscaling of kitchen, dining room, and staff. Such changes were
painful, at best, and impossible, at worst, because of the physical constraints of the hotel
buildings. Yet, as Edward Boss discovered, competitive pressures pushed hotels toward
the European Plan because customers avoided hotels that clung to the American Plan.
For the most part, by 1920, the American Plan had nearly vanished from hotels in large
cities, and it was only in the smaller centres that it persisted (Hotel Monthly, 1920b).
Even where it was retained, as in some of Edward Boss’s hotels, the American Plan
came under ongoing scrutiny. In the US, the last bastion of the American Plan was resort
hotels, where it survived into the post-World War II era. Today the American Plan can
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be found in many Caribbean and Mexican resorts under the less ambiguous label of
“all-inclusive”, but the concept has vanished from hotels within the US.
Efforts to eliminate tipping
Hotel Monthly occasionally discussed innovations that minimized or eliminated tipping.
If tipping was a way to supplement employees’ wages and reduce payroll expenses, it is
not clear why hotels would go out of their way to eliminate situations where tips were
expected. However, the articles in Hotel Monthly suggest that tipping was so annoying
that customers might avoid making certain transactions altogether, or might switch
their patronage to a hotel that found ways to minimize occasions when tips would be
solicited. One of these anti-tipping innovations was the Servidor, a compartment built
into the door of each hotel guestroom (Hotel Monthly, 1918a, 1919a, 1919b, 1921a).
The compartment could be accessed from either side, so that an employee could leave
cleaned laundry or other items without entering the room or even knocking on the door,
thereby eliminating a situation in which a tip would be expected. The Servidor was barely
large enough to hold a garment on a coat hanger and small items, causing the guestroom
door to bulge about 30 cm at its thickest point. At that time, it was common for hotel
guests when shopping to have the store deliver merchandise to the hotel on a cash-ondelivery basis. The hotel would pay for the merchandise, deliver the goods to the guest’s
room (or Servidor), and then add the charge to the guest’s bill to be paid upon checkout
(Hotel Monthly, 1920a). Due to this custom of having retail purchases delivered to the
hotel, the occasions on which a tip would be expected would be numerous without a
Servidor. As well, it was customary for complimentary items such as ice or writing paper
to be delivered to a guestroom upon request, and the Servidor allowed these things to
be delivered without the awkwardness of face-to-face interaction between the customer
and the hotel employee who expected a tip.
In the same vein, Hotel Monthly described experiments with cafeterias in lieu of
ordinary table service because tipping of waitstaff could be eliminated, coupled with
faster customer turnaround and reduced labour expenses (e.g., Hotel Monthly, 1920c).
A sticking point was that customers often felt it demeaning to carry their own dishes
to their table (Cowan, 1919). In 1920, one Cincinnati hotel handled this dilemma by
making “bus boys” available to carry dishes from the cafeteria line to the customer’s
table, on an optional basis in exchange for a tip (Hotel Monthly, 1920d), although one
would think that introducing a new tipping occasion would defeat the purpose of the
cafeteria format. Hotel Monthly’s description of this hotel’s practice implies that it was
quite unusual. Hotel Monthly also describes a separate incident in which a large Chicago
restaurant changed to a cafeteria format to break a strike by waiters (Hotel Monthly,
1920f). Despite initial enthusiasm for hotel cafeterias in lieu of dining rooms, the cafeteria
format had little staying power.
The idea of a service charge added to a restaurant bill, in lieu of a tip, had been
occasionally attempted in the US, but never became accepted practice. As a 1919 issue
of Hotel Monthly put it, attempts to add a 10% service charge were “not taken kindly to
by caterers [waitstaff] or the public” (Hotel Monthly, 1919c, p. 42).
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The evolution of attitudes toward tipping was not a one-way pattern; there were contexts
where tipping was successfully squelched. While contemporary Americans are devout
tippers in restaurant situations, they would never tip at a banquet, that is, where a large
number of people at a meeting are served a set meal. An item in Hotel Monthly (1920e)
implies that tipping at banquets was common and described one Philadelphia hotel that
had successfully eliminated the practice by distributing printed cards asking patrons not
to tip. It is paradoxical that tipping simultaneously became more entrenched in restaurants
while being stamped out at banquets, although this does fit the broader pattern of tipping
being most likely when the customer could choose what to order. These incidents reflect
ambivalence among hotel managers about whether tipping was desirable (supplementing
wages) or undesirable (repellent to customers).
Such was the controversy surrounding tipping that between 1909 and 1915, six states
– none of them populous northeastern states – passed legislation to prohibit tipping
(Segrave, 1998, Appendix 2). While the details varied among the six states, such laws
typically placed the legal responsibility upon both customer and employee as well as the
employer, and penalties were as high as 30 days in jail plus fines. Much like the effort
to forbid consumption of alcohol which came a few years later, efforts to criminalise
tipping were futile despite the harsh penalties.
As explained by a clerk at a New York hotel, “The system of giving tips redounds in a
great degree to the benefit of management. If it were not for the tips that the employees
who are in close touch with the patrons get, we could not secure their services for the
same rates that we pay…. The hotels of the country discountenance any laws that are
intended to prevent the giving of tips. Some States [other than New York] have passed
such laws but that does not stop tipping” (New York Hotel Record, 1912, p. 9).
The futility of anti-tipping laws is also conveyed in a 1915 article describing an incident
in a railway dining car. A sign saying “No tipping allowed” was posted when the train
was in Iowa because that state had a no-tipping law, but a dining car steward accepted a
tip anyway. When asked for an explanation, the steward responded that all he “could do
was to put up the sign and leave the observance of the law to the diner” (Hotel Monthly,
1915c p. 68).
In a 1919 report of an hoteliers’ trade association, under the heading “Anti-tipping law
a failure”, the organization’s lawyer stated that “the no-tip law [was] a joke” (Hotel
Monthly, 1919b, p. 74). The six states with anti-tipping laws eventually repealed them,
the last being Mississippi which repealed its law in 1926 (Segrave, 1998, Appendix 2).
Prohibition
Prohibition had wide-ranging effects on American life, but its impact on tipping practices
has received little attention. From 1919 to 1933, the US had nationwide Prohibition in
which all alcoholic beverages were illegal. By 1919, the US had gone a long way toward
embracing tipping as a social norm, but Prohibition hastened and solidified that trend
in two ways:
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First, in response to the dilemma of what a hotel should do with its old bar, many hotels
converted their bars into “lunch rooms” which sold à la carte meals to anyone (Hotel
Monthly, 1916a). For a hotel of the era, a typical layout was to have a dining room
intended for overnight customers that was accessible only through the lobby, and a barturned-lunch room that had street frontage, intended to appeal to the public. Hoteliers
were more tolerant of tipping in settings where customers chose from a menu, rather
than being served a set meal, because the tip did not seem like a bribe to the server to
give away food; hence, these newly created lunch rooms constituted another venue in
which tipping was likely.
Second, Prohibition caused severe financial pressure on hotel managers, who could no
longer rely on alcoholic beverages to cross-subsidize other hotel operations. Prohibition
created a more intense interest in accounting practices among hoteliers, particularly in
the separation of costs and revenues for food services as opposed to guestrooms (Hotel
Monthly, 1921b). An ongoing discussion in Hotel Monthly was how hotel managers
were more critically examining whether each service of a hotel was profitable and
making changes accordingly. From the tone of the discussion, it appears that many hotel
managers had never calculated which hotel services were profitable and which were not.
In many cases, Prohibition caused hotels to switch from American Plan to European
Plan to boost the profit of the dining room. While some hotel executives, such as the
above-mentioned Edward Boss, had bad experiences with the changeover, the overall
trend was toward adopting the European Plan. Apart from the belief by most hoteliers
that the European Plan was more profitable, hotels adopting the European Plan could
more easily disaggregate room revenues from meal revenues and determine whether
meal prices were high enough to produce a profit. In contrast, under the American Plan,
it was problematic to calculate what portion of the room rate was actually payment for
meals, and thus determine the profitability of food services vis-à-vis lodging. Because
managers were more receptive to their staff receiving tips under European Plan, hotel
managers’ tendency to respond to Prohibition by switching to the European Plan had
the effect of making tipping more common.
The impact of Prohibition on tipping was heightened by the arrival of Scientific
Management, a managerial philosophy associated with Frederick Taylor (1911).
Coincidentally, Prohibition occurred at approximately the same time as Scientific
Management, and in hotels, as in other types of organizations, it became fashionable to
construe management as a science (Jakle & Sculle, 2009; Mentzer, 2010). This newfound
emphasis on numerical analysis was used to justify the transition from American Plan
to European Plan.
Tipping becomes accepted
The hotel industry’s frustration and ambivalence to tipping was expressed with unusual
bluntness by the editor of Hotel Monthly:
“The tip is a nuisance. All agree to that. But it is established, and deeply rooted, and
very difficult to eradicate. It has been tried time and time again to do away with it – to
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pay a sufficient wage – but always more or less of a failure; for the public, or a large
proportion of the public, will, in the public eating places, try to buy better service than
the average diner gets; and there is the trouble” (Hotel Monthly, 1918b).
A turning point in Hotel Monthly’s coverage of the tipping controversy occurred in
the July 1921 issue when it published an article by Wallace Rice, a Chicago journalist
and essayist, that was not only supportive of tipping, but furthermore linked tipping to
American patriotism. With the awkward title, “Proving that Tipping Is Good American
Today”, Rice suggested that the nontipper is a freeloader and that America’s anti-tipping
tradition was anachronistic:
“When it gets so that a man pays money to another man in order to retain his own selfrespect, which he forfeits if he doesn’t, it certainly may be said that tipping has entered
the national consciousness” (Rice, 1921, p. 70).
Whereas the lack of tipping had once been regarded as an expression of American
equalitarianism, now tipping was seen as an expression of healthy American values.
Even after 1921, Hotel Monthly would occasionally describe a hotel or restaurant whose
strict no-tipping policy was presented to the reader in complimentary terms, but such
articles implied that these no-tipping practices, while praiseworthy, were notable because
of their rarity (Hotel Monthly, 1922a, 1922b).
Conclusions
The history of tipping for dining in the US can be divided into four periods, with the
caveats that specific years are approximate, and that the transitions from period to period
were gradual rather than abrupt:
Up to 1850s: The proprietor of a lodging place personally presided over dinner, with all
customers dining together at the same table. Room rates included meals (i.e., American
Plan), and customers had no choice of food (table d’hôte). Tipping was unthinkable
because it would violate the fiction that the customer was akin to a houseguest in a
private home.
1850s to 1900: Hotels in large cities grew to the point that customers would be served
by employees, not by the proprietor personally. The American Plan and table d’hôte
continued to be typical. Under the American Plan, managers opposed tipping because
they perceived it as a bribe to give away more food than a customer would otherwise
be served.
1900 to 1920s: The European Plan (meals charged separately) supplanted the American
Plan. The transition was very gradual, with many urban hotels abandoning the American
Plan in the late 1800s, small town hotels clinging to it until the 1920s, and resort hotels
making the transition even later. Managers were more amenable to tipping under the
European Plan because they regarded it as a supplement to wages rather than as a bribe
for giving away food. Yet there was still controversy, even to the point that tipping was
illegal in some states.
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1920s onward: Opposition to tipping had almost entirely dissipated, and those states
having laws against tipping had repealed them. The American Plan had vanished from
urban centres and was rapidly losing ground in smaller communities. In 1919, Prohibition
caused hotels to scrutinize more closely the profitability of their remaining services,
leading them to adopt the European Plan if they hadn’t already. An unintended side
effect of Prohibition was an increase in tipping, because the European Plan led a greater
propensity of customers to tip. The 1921 Hotel Monthly article (Rice, 1921) denigrating
non-tippers as un-American is evidence that a turning point had been reached, and tipping
at meals has ever since been thoroughly entrenched as a norm of behaviour in the US.
Nonetheless, this norm continues to evolve as the customary percentage of a tip creeps
upward from 15% to 20% or even higher. As well, other fine points of the unwritten
rules of tipping are in a state of flux, such as whether the tip should be calculated on
the pre-tax or after-tax amount, or whether it is necessary to tip in a coffee shop where
customers are served while standing at the counter.
As the percentage tip expected becomes ever higher, coupled with growing numbers
of international visitors who are resistant to, or unaware of, the US tipping tradition, it
remains to be seen if US dining patrons will retain the custom of tipping in its current
form over the long term. On the other hand, if tipping could survive being treated as a
criminal act, perhaps it can survive anything.
Footnote
1. This study addresses tipping in the US and uses “American” as a synonym for
United States. However, it might be noted that Canadian tipping customs are roughly
similar to those of the US, although the percentage of the average tip on a meal is
slightly lower (Maynard & Mupandawana, 2009). In Canada, minimum wage laws
vary across provinces; some provinces specify a lower minimum wage for tipped
employees while other provinces do not. The province of Ontario, which includes
Toronto and Ottawa, has an hourly minimum wage of C$10.25, and for employees
who serve liquor it is C$8.90 (Ontario, 2011).
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